The Seventh Ministerial Meeting of The Coalition of Finance Ministers for Climate Action
BY Prime Minister and Minister of Finance Philip Brave Davis
19 April 2022
In September of 2019, The Bahamas was hit by Hurricane Dorian, one of the most catastrophic hurricanes on record. In addition to the terrible and tragic impact on Bahamian lives and communities, the hurricane had a major fiscal impact from which we are still recovering.
The science is clear: human-induced climate change will continue to influence the frequency and intensity of hurricanes, and those hurricanes will continue to constitute an enormous threat to my country.
Hurricane Dorian caused approximately $3.4 billion in loss and damages, equal to one-quarter of our GDP. We did not emit the greenhouse gases that are causing climate change, but we are reaping the damage nonetheless.
As a country on the frontline of climate change, we believe it is of the utmost importance to keep the global goal of 1.5⁰C within reach, as this is a critical threshold to ensure the survival of Small Island Developing States (SIDS) and Least Developed Countries.
An important tool for achieving this goal is the mobilization of climate finance to ensure that countries can meet national mitigation and adaptation targets.
We recognize that carbon prices and markets are evolving quickly. Saleable, verified emission reductions or removal credits, or other carbon mitigation measures under the standards of the Paris Agreement, can be a key tool for addressing the climate finance gap and a catalyst for carbon action.
Carbon prices impose a cost on emissions and therefore play a fundamental role in setting economic incentives for clean development and in transitioning to a decarbonized economy.
A multilateral approach to addressing carbon pricing will be key, and it is crucial that there is fairness and equity in carbon pricing across various compliance and voluntary markets. The price of emitting a ton of carbon in the Global North should not differ from the price in the Global South.
The war in Eastern Europe reminds us that addressing energy security should not come at the price of devaluing decarbonization efforts. The value of oil, gas, and coal cannot continue to increase in value without having an impact on the price of carbon credits. Unless carbon credits are valued correctly, it will have a major impact on our ability to keep the goal of 1.5 degrees within reach.
Energy security and energy independence go hand in hand. Governments, regional blocs, and other multilateral institutions must show that they are willing to use regulatory levers to limit emissions and incentivize the use of market-based emission reduction measures, which will support national decarbonization efforts (and increase the value of carbon prices).
Small Island Developing States like mine have absorbed multiple and repeated financial shocks associated with climate change and the ongoing pandemic. We must take steps to ensure our countries can profitably participate in global carbon market initiatives. Multilateral efforts to pair our countries with countries that have had experience in placing carbon credits under the Kyoto Protocol Clean Development Mechanism and other voluntary marketplaces, will be critical to our advancement in this emerging financing market.
As our country prepares to table legislation that will allow our participation in the global carbon market, we are open to partnerships with other Small Island States and with countries who have advanced expertise in the carbon markets. The Bahamas is keen to be an innovator in this space and we believe that partnerships will aid in sending the right price signals for carbon credits and enhanced climate action.